Calculator · Swing Trading

Swing trade risk calculator

Enter your account size, the percent you accept losing on the trade, and the entry, stop and target prices. The calculator returns the share count, the reward-to-risk ratio in R, the win rate the setup needs to break even, and what an overnight gap past the stop would cost.

Your numbers

Shares

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Position value

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Reward : risk

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Breakeven win rate

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The working

    Size from the stop

    Decide where the trade is wrong first, from the chart, then let the share count follow. The distance from entry to stop is the risk per share, and dividing the dollars you accept losing by that distance gives the number of shares. A wider stop means fewer shares and the same dollar risk. Where to put the stop on a swing trade covers placing it beyond the last swing low with a buffer for normal noise.

    Reward in R, and the win rate it needs

    The distance from entry to target, divided by the risk per share, is the reward measured in R. A 2R target pays twice what the stop costs. The breakeven win rate follows directly: one divided by one plus R. At 2R you need to be right one time in three to break even; at 1R, one time in two. The R-multiple entry goes on to expectancy, which is the same idea averaged over many trades.

    The gap line matters most for positions held through a weekend or an earnings date, where the stock can open past the stop. Read holding over the weekend is a sizing decision before carrying a full-size position into one.

    Questions about this calculator

    What does the breakeven win rate mean?

    It is the share of trades that would have to reach the target, with the rest stopped out at the stop, for the strategy to make nothing and lose nothing. At a 2R target it is one in three. If your trades of this kind win less often than that, the setup loses money over time however good each one looks.

    Does the stop cap my loss at the dollar risk shown?

    Only while the stock trades through the stop. A stop order becomes a market order when it triggers, so an overnight gap past it fills lower, and the loss is larger. The gap line shows that case.

    What percent of my account should I risk?

    That is a decision about how many losing trades in a row you can take. Small fixed percentages are common because they keep a run of losses survivable; the calculator shows the arithmetic for whatever figure you choose.

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